County Government of Kiambu v Commissioner of Domestic Taxes [2025] KETAT 62 (KLR)

County Government of Kiambu v Commissioner of Domestic Taxes (Tax Appeal E165 of 2024) [2025] KETAT 62 (KLR) (31 January 2025) (Judgment)

Neutral citation: [2025] KETAT 62 (KLR)

Republic of Kenya

In the Tax Appeal Tribunal

Tax Appeal E165 of 2024

RM Mutuma, Chair, T Vikiru, Jephthah Njagi, M Makau & D.K Ngala, Members

January 31, 2025

Between

The County Government Of Kiambu

Appellant

and

Commissioner Of Domestic Taxes

Respondent

Judgment

1. The Appellant is a County Government established under the First Schedule of the Constitution of Kenya, 2010.

2. The Respondent is a principal officer appointed pursuant to Section 13 of the Kenya Revenue Authority Act (KRA), Act No. 2 of 1995, and KRA is empowered to enforce and administer provisions of written laws set out in Section 5 as read together with the First Schedule of the KRA Act.

3. The Respondent conducted an audit of the Appellant’s tax affairs and issued it with a Notice of Assessment dated 18th April 2023 for taxes amounting to Kshs. 612,390,129. 00 under the tax heads of PAYE on gratuity payments, motor vehicle benefits, secondary employees, airtime benefits, and on servants, as well as Withholding Income Tax and VAT.

4. The parties engaged in reconciliation deliberations and following the same, the Appellant vide a letter dated 29th June 2023 committed to pay Kshs. 102,188,385. 00 conceded to as tax payable.

5. The Appellant partially objected to the assessments of taxes not conceded and lodged an objection dated 2nd August 2023 received by the Respondent on 8th August 2023.

6. Upon review of the Appellant’s objection, the Respondent vide the letters dated 24th August 2023 and 21st September 2023 issued its Objection Decision partially accepting the Appellant’s objection by partially amending the VAT assessment and confirming the PAYE and Withholding Tax assessments as raised.

7. The Appellant, being dissatisfied with the Respondent’s Objection Decision, lodged this Appeal at the Tribunal on 1st February 2024, having been granted leave of the Tribunal in TAT Misc. Application No. E186 of 2023 County Government of Kiambu vs. Commissioner of Domestic Taxes on the 18th January 2024.

The Appeal 8. The Appeal is premised on the following grounds as stated in the Appellant’s Memorandum of Appeal dated 2nd February 2024 and filed on 9th February 2024;a.That the Respondent erred in law and in fact by claiming withholding taxes amounting to Kshs. 156,000,000. 00 without any basis;b.That the Respondent erred in law by demanding for withholding taxes on transactions that do not attract withholding taxes;c.That the Respondent erred in law in demanding PAYE on pool cars used by the County officers to discharge official functions;d.That the Respondent erred in law in failing to appreciate that the transactions anchoring the imposition of levies and other charges by County Governments does not amount to a ‘taxable supply’ within the meaning of taxable supply under Section 2 of the VAT Act;e.That the Respondent erred in law in failing to appreciate that provision of services by a County Government under the fourth schedule of the Constitution does not amount to a business under Section 2 and 5 of the VAT Act, 2013;f.That the Respondent erred in law by failing to appreciate that the charges and levies from the impugned transactions are a form of tax being imposed by the County Governments and cannot be lawfully subjected to further tax;g.That the Respondent erred in law by failing to appreciate that the VAT Act cannot oust express provisions of Article 209 of the Constitution;h.That the Respondent erred in law in failing to appreciate that any doubt or ambiguity in a tax legislation operates in favour of the tax payer;i.That the Respondent erred in law in failing to appreciate that tax legislations have to be subjected to strict interpretation;j.That the Respondent’s Objection Decisions dated the 24th August 2023 and 21st September 2023 constitute a violation of the Appellant’s right to Fair Administrative Action under Article 47 of the Constitution as read together with the provisions of the Fair Administrative Action Act; and,k.That the Respondent’s tax decisions dated 24th August 2023 and 21st September 2023 violate the Appellant’s right to legitimate expectation.

The Appellant’s Case 9. The Appellant’s case is premised on its Statement of Facts dated 2nd February 2024 and filed before the Tribunal on 9th February 2024. By an order of the Tribunal issued on 12th November 2024 in the presence of the Appellant’s legal representative, the Appellant’s written submissions were expunged from the record, thus its case shall be considered on the basis of its pleadings.

10. The Appellant submitted that according to Section 5 of the VAT Act aforesaid, VAT is charged on, in the context of this case, a taxable supply made by a registered person in Kenya. The Appellant further submitted that Section 2 on the other hand defines taxable supply to mean a supply other than an exempt supply made in Kenya by a person in the course or furtherance of a business carried on by that person.

11. The Appellant averred that a levy charged to a person by a County Government is already a form of tax on that person as a pre-condition to accessing the services.

12. The Appellant averred that to assist the County Government discharge its functions in the fourth schedule of the Constitution, the County Government imposes a levy on whoever wishes to benefit from the said service.

13. The Appellant further averred that the fact that a supply is not exempt does not automatically mean it is vatable.

14. The Appellant submitted that the County Government is not like every other private person or organization, therefore, it is obligated by the Constitution to provide specified services to the public and providing the said services cannot be synonymous with provision of a supply in furtherance of a business.

15. The Appellant averred that the assessment of Kshs. 156,206,535. 00 is unlawful in totality because it had no legal or factual basis.

16. The Appellant further submitted that its tax regime employs a self-assessment model and as such, for the Respondent to purport to demand taxes which are foreign to the person engaging in the transactions yielding the said taxes without then having any document in support of the occurrence of a transaction yielding the assessed tax is to engage in unlawful tax practices.

17. The Appellant averred that the transactions relating to medical and laboratory equipment, non­ pharmaceuticals, inter entity transfers, food and ration, retention monies and return to drawer do not attract withholding taxes.

18. The Appellant averred that in its letter dated 2nd August 2023, the Appellant reminded the Respondent that detailed soft copies of the transactions had earlier been shared with the Respondent, receipt of which was acknowledged on 30th June 2023.

19. The Appellant averred that in its Objection Decision dated 21st September 2023, the Respondent, having acknowledged receipt of the said transactions as detailed in the supporting schedules now purported to claim that the contracts and LPO’s relating to the said transactions had not been shared.

20. The Appellant averred that the Respondent was actually aware that those transactions were not superficial and the lack of the LPO’s or contracts did not negate their occurrence. Indeed, some of the items referred to such as medical and laboratory equipment could be inspected physically.

21. The Appellant submitted that Section 3 (2) of the Income Tax Act specifies income upon which income tax is chargeable as being inter alia, income in respect of any employment or services rendered.

22. The Appellant submitted that Section 5 (2) (B) of the said Act then stipulates that where an employee is provided with a vehicle, they shall be deemed to have received a benefit which would then attract income tax.

23. The Appellant averred that the Respondent clearly explained that they do procure departmental vehicles which are then assigned to officers in the said departments to use when discharging official functions under the Constitution and County Governments Act.

24. The Appellant averred that the right to legitimate expectation, derived from Article 47 of the Constitution and Section 4 (3) of the Fair Administrative Action Act prevents anyone applying the constitution and similar statutes from deviating from the ordinary course of action.

25. The Appellant submitted that the Respondent’s demand for VAT on income by the County Government fails the Article 47 test and further violates the Appellant’s right to legitimate expectation.

26. The Appellant averred that VAT being a consumption tax and the alleged taxable supplies having already been made as far as 6 years ago, the Respondent has put the Appellant in a situation where it then has to meet a burden that would ordinarily be borne by someone else.

27. The Appellant submitted that VAT was not chargeable 10 years ago on income generated by the Appellant in the discharge of its Constitutionally decreed functions, hence there was no reason for the Appellant to factor VAT in its charges or levies.

28. The Appellant averred that therefore, the Respondent cannot then punish the Appellant for discharging its functions under the same circumstances as 14 years ago, there having been no change in the Constitution of Kenya.

Appellant’s Prayers 29. The Appellant prayed that the Tribunal;a.Allows this Appeal;b.Annuls the Respondent’s Objection Decision dated 24th August 2023 and 21st September 2023 based on the grounds above as well as the statement of facts attached and upholds the Appellant’s objections to the tax decisions; and,c.Awards costs of this Appeal to the Appellant.

The Respondent’s Case 30. The Respondent’s case is premised on the following documents before the Tribunal;a.Statement of Facts dated and filed on 11th March 2024; and,b.Written submissions dated 4th October 2024 and filed on 11th October 2024.

31. The Respondent averred that the Appellant in the present dispute was issued with an assessment which it disputed. The Respondent further submitted that it issued an Objection Decision and confirmed the taxes amounting to Kshs. 373,324,540. 00.

32. The Respondent averred that through its objection, the Appellant admitted to the taxes amounting to Kshs. 102,481,447. 00 and proceeded to pay Kshs. 15,000,000. 00 on 9th May 2022 and Kshs. 12,481,447. 00 in the month of June 2023 while promising to clear the remainder of the amount.

33. The Respondent submitted that Section 52 of the Tax Procedures Act provides as follows;1. A person who is dissatisfied with an appealable decision may appeal the decision to the Tribunal in accordance with the provisions of the Tax Appeals Tribunal Act, 201 (No. 40 of 2013).2. A notice of appeal to the Tribunal relating to an assessment shall be valid if the taxpayer has paid the tax not in dispute or entered into an arrangement with the Commissioner to pay the tax not in dispute under the assessment at the time of lodging the notice.”

34. The Respondent submitted that Section 52 (2) of the Tax Procedures Act is unambiguous, requires no interpretation and is couched in mandatory terms. The Respondent further averred that a litigant’s Appeal to the Tribunal is only valid if the undisputed taxes are paid.

35. The Respondent averred that the operative word in Section 52 (2) of the Tax Procedures Act is shall. The Black's Law Dictionary, defines the word “shall” as follows;“As used in statutes, contracts, or the like, this word is generally imperative or mandatory. In common or ordinary parlance, and in its ordinary significance, the term "shall" is a word of command, and one which has always or which must be given a compulsory meaning: denoting obligation. It has a peremptory meaning, and is generally imperative or mandatory.”

36. The Respondent averred that the wording of Section 52 (2) is in the form of a command or mandate. That it is couched in such mandatory terms that the court has no discretion in this matter and the only thing it can do is to dismiss the current Appeal for want of compliance with the statutory provisions.

37. The Respondent averred that the Appellant having conceded to the Respondent’s assessment of amounting to Kshs. 102,481,447. 00 had a statutory obligation to settle the same before filing an Appeal at the Tax Appeals Tribunal, further, the Appellant did not also enter into an arrangement with the Respondent to pay the undisputed taxes.

38. The Respondent submitted that therefore, the Appellant did not comply with the provisions of Section 52 (2) of the Tax Procedures Act and as such did not lodge a valid Appeal before this Tax Appeals Tribunal and the mere fact that the Appellant has been paying the undisputed tax in instalments does not make it an arrangement.

39. The Respondent relied on the Income Tax Appeal No. 12 of 2018: Hewlett Packard East Africa Limited vs. The Commissioner of Domestic Taxes [2019] eKLR. The Court while dismissing an Appeal that was lodged before payment of undisputed taxes had this to say;“In the end it follows that this court having determined that the Appellant’s appeal was not in compliance with section 52(2) of Tax Procedures Act grounds Nos. 1, 2 and 3 of this appeal before the Tribunal was incompetent in view of section 52 (2) of the Tax Procedures Act and having been incompetent no appeal can lie on those grounds before this court.”

40. The Respondent submitted that procedure is very important and must be strictly adhered to. The Respondent averred that it had adhered to all statutory timelines and performed its part of the obligations imposed by the Tax Procedures Act and it is only fair that the Appellant be made to do the same.

41. Further, the Respondent relied on the case of Kiriinya Mukiira vs. Middle East Bank Limited [2018] eKLR where Justice Mary N. Kasango stated as follows;“That procedure in my view, is not there for no reason, it is there for parties to abide by it. The importance of following laid down procedure was considered in the case of Moses Mwicigi where the Supreme Court stated:“This court has on a number of occasions remarked upon the importance of rules of procedure, in the conduct of litigation. In many cases, procedure is so closely intertwined with the substance of a case, that it befits not the attribute of a mere technicality. The conventional wisdom, indeed, is that procedure is the handmaiden of justice. Where a procedural motion bears the very ingredients of just determination, and yet it is overlooked by a litigant, the Court would not hesitate to declare the attendant pleadings incompetent.”

42. The Respondent averred that an analysis of the records provided indicated that the county had made gratuity payments to various employees employed on contract basis and the records revealed that the PAYE was not fully accounted for.

43. The Respondent, further averred that the additional assessments were raised by charging VAT at a rate of 16 percent on various revenue streams and charging 30 percent on motor vehicle benefits, secondary employees, airtime benefits and servants.

44. The Respondent averred that on VAT, the Appellant was requested to provide the following: a detailed breakdown of general charges of revenue streams of Kiambu County, on PAYE, the Appellant was further requested for motor vehicle movement schedules/activity logs and any other proof to show that the vehicle in question are pool cars, on PAYE on secondary employees, the Appellant was requested to provide evidence of remittance of PAYE on secondary employees in relation to notice of assessment, on PAYE on airtime benefits.

45. The Respondent submitted that the PAYE on airtime benefit the Respondent relied on the provisions of the Income Tax Act, Cap 470; which states;“Where the cost or the fair market value of a benefit cannot be determined the Commissioner may prescribe the value such as Telephone (landline and mobile phone) value of benefit 30% of bills.”

46. The Respondent relied on the case of Kenya Revenue Authority vs. Man Diesel & Turbo Se, Kenya [2021] eKLR the court held“….that Section 56 of the TPA in peremptory terms places the burden of proof in tax cases on the tax payer. Generally, the taxpayer has the burden of proof in any tax controversy. The taxpayer must demonstrate that the commissioner's assessment is incorrect. The taxpayer has a significantly higher burden. The taxpayer must prove the assessment is incorrect. The shifting of the burden of proof in tax disputes flows from the presumption of correctness which attaches to the Commissioner's assessments or determinations of deficiency. The commissioner's determinations of tax deficiencies are presumptively correct. Although the presumption created by the above provisions is not evidence in itself, the presumption remains until the taxpayer produces competent and relevant evidence to support his position. If the taxpayer comes forward with such evidence, the presumption vanishes and the case must be decided upon the evidence presented, with the burden of proof on the taxpayer.”

47. The Respondent averred the Appellant was requested to provide evidence of payment of PAYE on servants in relation to Notice of assessment and also provide Employment contract for the individual servants.

48. The Respondent averred that having issued assessment orders, the Appellant ought to have lodged its objection pursuant to the dictates of Section 51 (3) (c) of the Tax Procedures Act.

49. The Respondent submitted that Section 51 (3) (c) of the Tax Procedures Act provides as follows;“A notice of objection shall be treated as validly lodged by a taxpayer under subsection (2) if—a.the notice of objection states precisely the grounds of objection, the amendments required to be made to correct the decision, and the reasons for the amendments; andb.in relation to an objection to an assessment, the taxpayer has paid the entire amount of tax due under the assessment that is not in dispute.c.all relevant documents relating to the objection have been submitted.”

50. The Respondent posited that breach of compliance with Section 51 (3) (c) of the Tax Procedures Act compelled the Respondent to partially reject the Appellant’s Objection Pursuant Section 51 (4) and that the Appellant failed to adduce sufficient accompanying evidence to support the objection despite several reminders.

51. The Respondent submitted that it requested the Appellant to provide documents such as supporting ledgers and invoices, and a detailed breakdown of the Appellant’s revenue streams to verify its tax obligations and compliance which it failed to avail.

52. The Respondent submitted that Section 54 A (1) of the Income Tax Act requires that any person carrying on a business shall keep records of all receipts and expenses, goods purchased and sold and accounts, books, deeds, contracts and vouchers which in the opinion of the Commissioner, are adequate for the purpose of computing tax.

53. The Respondent averred that the documents should be within the taxpayer’s control and hence no difficulty would be suffered by the taxpayer in providing said documents.

54. The Respondent relied on the case of Afya Xray Centre Limited vs. Commissioner of Domestic Taxes TAT Appeal No. 70 of 2017, where the Tribunal had the following to say;“From then foregoing chain of events, it is our understanding that the Appellant failed in its duty in providing these documents, in order that a comprehensive audit of its affairs be done. Accordingly, the Respondent can hardly be faulted for raising the assessment in accordance with the availed documents. Moreover, the Appellant had an opportunity to counter the Respondent’s finding after the preliminary finding and after the confirmation of the assessment. Both are instances, where the Appellant could have produced its books of accounts to counter the Respondent’s assessment after all the Appellant by law bears the burden of proof.”

55. The Respondent further relied on the Judgment in Meera UmojaKenya Limited vs. Commissioner of Domestic Taxes Nairobi TAT Appeal No. 93 of 2019 where the Tribunal held:“17. Additionally, the Appellant’s objection failed to comply with the validity requirement under Section 51 (3) (c) of the TPA as the Appellant did not provide all the supporting documents to contest the assessment. We find the Appellant failed in its duty under Section 56 (1) of the TPA which places upon a tax payer the burden of proving the incorrectness of an assessed tax liability. Even now as the Appellant pleads its case in the Tribunal, there is hardly any evidence to counter the assessed taxes.”

56. The Respondent submitted that pursuant to Section 23 (1) of the Tax Procedures Act, a taxpayer has the duty to maintain records to enable the Commissioner to ascertain a person’s tax liability and the provision states that;1. A person shall—a.maintain any document required under a tax law, in either of the official languages;b.maintain any document required under a tax law so as to enable the person's tax liability to be readily ascertained; andc.subject to subsection (3), retain the document for a period of five years from the end of the reporting period to which it relates or such shorter period as may be specified in a tax law.”

57. The Respondent relied on the Judgment in Commissioner of Domestic Taxes vs. Structural International Kenya Ltd (Income Tax Appeal No. E089 of 2020) [2021] KEHC 152 (KLR) where the High Court held as follows at paragraph 48;“For the avoidance of doubt, the Tribunal is reminded that in matters where the issue is supply of goods, be it for VAT purposes or Corporation Tax, the burden is always on the trader/tax payer to show that, the documentation set out in the statute and in which he relies on arose out of a commercial transaction. Period. If additional documents, which would be reasonably expected to be in his possession is requested for to verify the alleged transactions, he should produce the same to the commissioner. That is what is expected of a keen and diligent trader.”

58. The Respondent submitted that it raised the assessment and informed the Appellant of the same in accordance with the provisions of Section 29 of the TPA.

59. The Respondent submitted that it is allowed by Section 24 (2) of the Tax Procedures Act to assess a taxpayer’s liability using any information available to them, which provides:“The Commissioner shall not be bound by a tax return or information provided by, or on behalf of, a taxpayer and the Commissioner may assess a taxpayer's tax liability using any information available to the Commissioner.”

60. The Respondent further averred that it is allowed to make additional assessments based on the available information to the best of his judgment pursuant to Section 31 of the TPA.

61. The Respondent averred that the Appellant herein bears the burden to demonstrate that it has discharged a tax liability.

62. The Respondent averred that Section 56 of the TPA as well as 30 of the TAT Act state that the burden of proof lies with the Appellant to demonstrate that the Respondents assessment is inaccurate or excessive.

63. The Respondent relied on the case of Primarosa Flowers Limited vs. Commissioner of Domestic taxes [2019] eKLR, where the Hon Makau J whilst making reference to the Australian case of Mulherin vs. Commissioner of Taxation [2013] FCAFC 115 held as follows;“……the onus is on the taxpayer in proving that the assessment was excessive by adducing positive evidence which demonstrates that the taxable income on which tax ought to have been levied…”

64. The Respondent submitted that the burden of proof lies on the Appellant since Kenya is based on a self-assessment regime where the taxpayer is required by the provisions of Section 23 of the Tax Procedures Act, 2015 and thus since the Appellant failed to avail the same, it has not discharged the burden of proof.

65. The Respondent averred that the Appellant was requested for the following information:i.Evidence of payment of PAYE on servants in relation to the period under review; and,ii.Employment contracts for the individual servants.

66. The Respondent averred that in the Objection Decision it stated clearly that it requested for the above documentations but it was not availed, that this formed the major ground upon which the Appellant’s assessments were confirmed.

67. The Respondent relied on the decision of the High Court in Republic vs. Kenya Revenue Authority Ex-parte Bata Shoe Company (Kenya) Limited [2014] eKLR, that;“…. Payment of tax is an obligation imposed by the law. It is not a voluntary activity. That being the case, a taxpayer is not obligated to pay a single coin more than is due to the taxman. The taxman on the other hand is entitled to collect up to the last coin that is due from a taxpayer.

The Respondent’s Prayers 68. The Respondent prayed the Tribunal to find;a.That the instant Appeal be deemed as fatally defective by dint of the outstanding taxes owed by the Appellant; and,b.That the Appeal herein lacks merit and should be dismissed with costs to the Respondent.

Issues For Determination 69. Having carefully reviewed the pleadings by both parties, the Respondent’s submissions together with annexures thereto, the Tribunal is of the considered view that the following issues fall for its determination: -i.Whether the Appellant’s Notice of Appeal dated 31st January 2024, is valid; and,ii.Whether the Appellant discharged the burden of proof.

Analysis And Findings 70. Having identified the issues for its determination, the Tribunal proceeds to analyze them as hereunder;i.Whether the Appellant’s Notice of Appeal dated 31st January, 2024 is valid.

71. The dispute at hand emanates from the Respondent’s Objection Decisions dated 24th August 2023 and 21st September 2023 wherein the Respondent confirmed assessed taxes of Kshs. 319,306,389. 00 for PAYE and VAT and Kshs. 54,018,150. 00 for withholding taxes respectively as due and payable by the Appellant.

72. The Tribunal notes that from the initial tax assessment of Kshs. 612,390,129. 00 the parties through several correspondence, meetings and exchange of documents had thrashed out the differences in the assessed tax heads to arrive at a position where the Appellant conceded to tax of Kshs. 102,481,447. 00 while the Respondent insisted on tax payable of Kshs. 156,206,535. 00

73. The Appellant on 29th June 2023 while conceding to tax of Kshs. 102,481,447. 00 proposed a payment plan to the Respondent where the conceded tax would be paid in 7 instalments with the last payment falling on 30th December 2023.

74. The Tribunal further notes that, the Appellant in its letter of objection dated 2nd August 2023 indicated that it had made the initial two instalments of the proposed payment plan being Kshs. 15,000,000. 00 and Kshs. 12,481,447. 00 on 9th May 2023 and in the month of June respectively, however evidence of the said payment was not sighted by the Tribunal.

75. The payment plan proposed by the Appellant on 29th June 2023 and referred to by the Respondent in its Objection Decision dated 21st September 2023 indicated that the final instalment of the conceded tax amount would be paid on 30th December 2023. The Appellant has not provided evidence to show that the said instalments for the tax not in dispute were paid in full.

76. On its part, the Respondent submitted that there was no valid Appeal before the Tribunal for the reason that the Appellant had failed to either complete the payment of conceded taxes or reach a settlement plan with the Respondent, that it had therefore failed to comply with the dictates of Section 52 (2) of the Tax Procedures Act.

77. Section 52 of the TPA states as follows regarding the Appeal of an Appealable decision at the Tribunal;1. A person who is dissatisfied with an appealable decision may appeal the decision to the Tribunal in accordance with the provisions of the Tax Appeals Tribunal Act, 2013 (No. 40 of 2013).2. A notice of appeal to the Tribunal relating to an assessment shall be valid if the taxpayer has paid the tax not in dispute or entered into an arrangement with the Commissioner to pay the tax not in dispute under the assessment at the time of lodging the notice.”

78. From our understanding, the plain meaning and express import of the above provisions is that the Tribunal assumes jurisdiction upon the Appellant filing a valid Notice of Appeal. The validity of the Notice of Appeal, however, is expressly conditional on, amongst others, the intended Appellant paying undisputed taxes or entering an arrangement or payment plan with the Respondent.

79. The Tribunal notes that the Appellant proposed a payment plan for the conceded taxes on 29th June 2023 and further indicated in its letter of objection on 2nd August 2023 that it had paid the first two instalments. It went further in the same letter to reiterate its commitment to honor the payment plan.

80. From the reading of Section 51 (3) (b) of the TPA, for the Appellant’s Appeal to be deemed as validly lodged, it ought to have entered into a payment plan with the Respondent. It is the act of acceptance of the offer by the Respondent and reduction of the same into an agreement that validates the Appellant’s Appeal.

81. The Tribunal notes that the Appellant made two instalments pursuant to its proposal, it notes that the act of payment does not constitute the entering into of an agreement. To the Tribunal’s mind the Appellant’s actions of proposing a payment plan and the payment of the two instalments do not constitute the entering of a payment plan as regards the undisputed taxes.

82. A perusal of the material adduced by the Appellant before the Tribunal shows that the Appellant failed to provide evidence to the Tribunal to demonstrate that at the time of lodging its Notice of Appeal on 31st January 2024 it had paid the tax not in dispute in full or negotiated another payment plan with the Respondent given that based on the initial payment plan of 29th June 2023 proposed by the Appellant, tax not in dispute ought to have been paid in full on 30th December 2023 which was a month before the Notice of Appeal was lodged.

83. There were no receipts or any evidence presented before this Tribunal to demonstrate that these payments were done in accordance with Section 52 (2) of the TPA.

84. The Tribunal holds that the Appellant had the obligation to pay the tax not in dispute or enter into an arrangement with the Respondent to pay the same. In the absence of which the Appellant has failed to demonstrate compliance with Section 52 (2) of the Tax Procedures Act hence failing to properly invoke the mandate of the Tribunal as envisaged by the TPA.

85. The Tribunal reiterates its decision in the case of TAT Appeal No 43 of 2017 Uchumi Supermarkets Ltd vs. Commissioner of Domestic Taxes where the Tribunal dismissed the Appeal and held that the Appeal was invalid and incompetent in law as it was in contravention of Section 52 (2) of the Tax Procedures Act.

86. It follows that the Appeal before the Tribunal having been found invalid and incompetent in law, the Tribunal cannot proceed to determine the other issue that fell for its determination as the same has been rendered moot.

Final Decision 87. The upshot of the foregoing analysis, is that the Tribunal finds and holds that this Appeal is incompetent and accordingly makes the following Orders;a.Appeal be and is hereby struck out; and,b.Each party to bear its own costs.

88. It is so ordered.

DATED AND DELIVERED AT NAIROBI THIS 31ST DAY OF JANUARY 2025ROBERT M. MUTUMACHAIRMANDR. TIMOTHY B. VIKIRU JEPHTHAH NJAGIMEMBER MEMBERMUTISO MAKAU DELILAH K. NGALAMEMBER MEMBER